Correlation Between VOXX International and Johnson Outdoors

Can any of the company-specific risk be diversified away by investing in both VOXX International and Johnson Outdoors at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VOXX International and Johnson Outdoors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VOXX International and Johnson Outdoors, you can compare the effects of market volatilities on VOXX International and Johnson Outdoors and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VOXX International with a short position of Johnson Outdoors. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOXX International and Johnson Outdoors.

Diversification Opportunities for VOXX International and Johnson Outdoors

-0.58

Correlation Coefficient

VOXX International  Johnson Outdoors

Excellent diversification

The 3 months correlation between VOXX and Johnson is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and Johnson Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Outdoors and VOXX International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VOXX International are associated (or correlated) with Johnson Outdoors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Outdoors has no effect on the direction of VOXX International i.e., VOXX International and Johnson Outdoors go up and down completely randomly.

Pair Corralation between VOXX International and Johnson Outdoors

Given the investment horizon of 90 days VOXX International is expected to generate 0.12 times more return on investment than Johnson Outdoors. However, VOXX International is 8.53 times less risky than Johnson Outdoors. It trades about 0.12 of its potential returns per unit of risk. Johnson Outdoors is currently generating about -0.16 per unit of risk. If you would invest  736.00  in VOXX International on December 29, 2024 and sell it today you would earn a total of  14.00  from holding VOXX International or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VOXX International  vs.  Johnson Outdoors

VOXX International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VOXX International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, VOXX International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Johnson Outdoors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Johnson Outdoors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with VOXX International and Johnson Outdoors

The main advantage of trading using opposite VOXX International and Johnson Outdoors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOXX International position performs unexpectedly, Johnson Outdoors can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Johnson Outdoors will offset losses from the drop in Johnson Outdoors' long position.

The idea behind VOXX International and Johnson Outdoors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.